A recent announcement from the Finance Minister of Canada stating that the minimum down payment has been increased from 5% to 10% as of February 15, 2016 has been misunderstood by many members of the public. The truth is 5% is still an acceptable down payment for most residential home purchase valued under $500,000. The difference is that for any purchase over $500,000 and less than $1,000,000 only the amount ABOVE the $500,000 must have 10% down payment.

 

The difference is actually minimal as show in the following example:

 

Purchase price: $600,000.

 

Previous down payment amount: 5% = $30,000

New down payment amount: 5% of $500,000 ($25,000) + 10% of $100,000 ($10,000) = $35,000

Difference: $35,000 - $30,000 = $5,000

 

 

As shown by this example the difference in minimum down payment amount has changed relatively little. This being said, it still is a new rule which may effect some purchasers. 

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Edmonton, February 2, 2016: Residential inventory continues to remain strong, as January closed out with 5,751 properties for sale on the MLS® System for the Edmonton Census Metropolitan Area (CMA). That’s an increase of 39.2% over this time last year, and 13.03% up over last month. Sales for January were down however, with 618 properties selling in the first month of 2016, down 13.32% month-over-month, and 7.21% lower year-over-year (YoY).

“Sales volumes are down, relative to the same time last year,” REALTORS® Association of Edmonton Chair Steve Sedgwick explains. “It is likely that home buyers are responding to current economic uncertainties. Although prices have dropped slightly, they remain stable. Growth in inventory may create more opportunities for potential buyers, and given the low interest rates, we remain optimistic about market growth as we head into the spring buying season.”

Prices in all categories saw a decline in the Edmonton CMA market as many lower priced properties sold in January. The all-residential price ended the month at $339,714, down 7.2% from December and 6.3% YoY. Single family house prices averaged $418,928, down 1.3% and 1.2% from the previous month and YoY, respectively. Condo properties sold for an average of $227,052, down 8.8% over last month and 10.3% YoY. And the increasingly popular duplex/rowhouse category, which held steady for much of 2015, took the biggest average selling price decrease, coming in at $326,885, down 12.7% from the previous month and down 13.6% from the same time last year.

January’s average days-on-market rose to 71, up from 62 in December and 58 in January 2015. The increase is mainly attributed to the increased days-on-market for condos, which sat at 85 for January, up from 62 from last month and 61 YoY.

“The increase in the average days on market just appears to reflect that buyers are taking time to consider their options before purchasing a new home,” Sedgwick said. “Clients are looking to their REALTOR® for advice and guidance as they navigate their own individual situations.”

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MLS® System Activity (for all-residential sales in Edmonton CMA1)

1 Census Metropolitan Area (Edmonton and surrounding municipalities)
2 Single Family Dwelling
3 The total value of sales in a category divided by the number of properties sold 
4 The middle figure in a list of all sales prices
5 Residential includes SFD, condos and duplex/row houses. 
6 Includes residential, rural and commercial sales

 

Information obtained from the Edmonton Real Estate Board Web Site: http://www.ereb.com/News&Events/LatestMarketStatistics.html

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Last month my son's hockey team had the pleasure of competing in The City Of Edmonton's Minor Hockey Week, one of the largest hockey tournament's in Canada. I was very fortunate to have been asked to play on the Edmonton Oiler's Alumni Team against the media as a kick off game for the tournament. What a thrill it was! 

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